The native token of the XRP Ledger, $XRP, has recently formed a bullish ‘golden cross’ pattern, which is formed when an asset’s short-term moving average crosses above its long-term moving average. Golden crosses are seen as a potential indicator for major price rallies.
The pattern was first shared by popular cryptocurrency analyst MackAttack, who noted this has “only been seen twice before with XRP in history,” and added that the golden cross could “well lead to a prolonged bull market that is unprecedented.”
According to Investopedia, there are three stages to a golden cross, with the first one requiring a downtrend to eventually bottom out as selling is depleted. The second stage comes after the shorter moving average “forms a crossover up through the larger moving average to trigger a breakout and confirmation of trend reversal. “ A third stage occurs with the continuation to an uptrend.
Notably, the golden cross was formed shortly after XRP saw its market capitalization drop by nearly $10 billion from its peak this year, which was seen shortly after a federal judge ruled the cryptocurrency isn’t necessarily a security.
According to available market data, the market capitalization of XRP jumped to $44.32 billion shortly after a federal judge in New York determined that the XRP token “is not necessarily a security on its face.” The ruling came after the U.S. Securities and Exchange Commission (SEC) sued Ripple back in 2020 for alleged violation of U.S. securities laws, arguing that the firm sold XRP without prior registration with the agency.
Judge Analisa Torres ruled in the lawsuit that XRP was a security when Ripple sold it to institutional investors years ago, but not to the public. The judge’s main argument was that institutional investors who bought XRP from Ripple in the past probably knew it had some features of a security, while investors who got XRP from crypto exchanges didn’t have the same information.
XRP’s price decline is likely a result of recent criticism from U.S. District Judge Jed Rakoff of the Southern District of New York, which contested Judge Torres’ differentiation between institutional sales and sales to retail investors on cryptocurrency exchanges.
Notably, a popular crypto analyst has recently suggested XRP’s price could soon drop below the $0.50 mark to nearly completely retrace the rise it saw after the initial ruling.
Institutional investors have, nevertheless, seemingly started accumulating the token. Cryptocurrency investment products investing in XRP and Cardano ($ADA) have been attracting significant inflows, with institutional investors seemingly preferring altcoins over the past week, with the exception of Ethereum.
Funds investing in Cardano, Solana ($SOL), and XRP have seen significant inflows, raking in $640,000, $600,000, and $500,000 from investors last week. In contrast, Ethereum-focused funds saw $1.9 million in outflows, while Avalanche ($AVAX) investment funds saw $400,000 in outflows.
Featured image via Unsplash.